MSU board adopts new budget, sets tuition rates

Contact: Kent Cassella, University Relations, Cell: (517) 599-8537, Direct: (517) 353-1772, Kent.Cassella@ur.msu.edu

Jun 17, 2011

GRAND RAPIDS, Mich. — The Michigan State University Board of Trustees today adopted 2011-12 budget development guidelines designed not only to preserve and build upon MSU’s strength and stature as one of the world’s top 100 research institutions, but also to provide continued stewardship of one of the state’s most critical knowledge economy assets.

As part of the budget, tuition and fees will be increased by 6.9 percent for resident undergraduate students and 7 percent for all others. This translates to an approximate increase of $788 for an in-state undergraduate student carrying a full load of classes.

“This budget strikes the balance – an especially difficult one this year – between access for Michigan residents and preserving the quality and world competitiveness of this tremendous public asset that is MSU,” said President Lou Anna K. Simon during the June MSU Board of Trustees meeting at the Secchia Center.

MSU continues to support access to education by dedicating more than $93 million in the 2010-11 budget to financial aid. The 2011-12 budget calls for an additional 10 percent increase which will complete an unprecedented three-year, 40 percent financial aid increase that will result in more than $100 million of general fund resources dedicated to financial aid. Financial aid represents the fastest-growing item in the university’s budget, increasing by 300 percent during the last decade.

Because of revenue uncertainties, MSU engages in a multiyear planning process. For the second year in a row, the MSU board approved a two-year budget framework including both 2011-12 budget development guidelines and 2012-13 preliminary general fund budget guidelines.

Budget guidelines were based on a 15 percent reduction in state appropriations. This year’s state appropriations are about $241.1 million, a decrease of $42.6 million from 2010-11.

Since 2000-01, MSU’s state appropriations have dropped 25 percent – a loss of $330 million during that period.

Since 2000-01, MSU has reduced operating expenses by approximately $123 million, including a 10 percent reduction during the past two years and the elimination of more than 350 full-time equivalent positions.

All regular MSU employees agreed to forgo wage increases this year and consented to health care coverage changes that saved MSU 10 percent of those costs, or about $10 million. They also agreed to capping subsequent health coverage cost increases at 5 percent through 2014. The university also will no longer provide funded postretirement health benefits to new employees.

The proposed 2011-12 budgets for the University General Fund, MSU AgBioResearch, MSU Extension and Intercollegiate Athletics total $1.21 billion. The general fund budget was increased by about the rate of inflation, or about 3.1 percent, over last year. The others increased by 2 percent.

By creating jobs, attracting external research support and improving the earning potential of Michigan residents and their subsequent tax contributions, MSU’s economic impact in Michigan approximates $4.1 billion.

MSU continues to see its research enterprise expand, with sponsored research totaling $495 million last year, an increase of about $90 million from the year before. In addition, MSU is a member of the University Research Corridor – a research and job-creation initiative with the University of Michigan and Wayne State University – a venture that has a nearly $15 billion economic impact in Michigan.

As part of its land-grant history, MSU serves a great number of Michigan students. Currently, 84 percent of its undergraduate enrollment comprises Michigan residents.

MSU was ranked among the nation’s 50 “best value” public universities by the Princeton Review, an education services company. Four MSU graduate programs rank first in the nation: nuclear physics, elementary education; secondary education; and industrial and organizational psychology. Fourteen programs rank among the nation’s top 10, and 26 programs rank in the top 20. Michigan State is one of only five public universities that rank in the top 10 for both study abroad participation and international student enrollment.

More information on MSU’s budget situation is available at www.budget.msu.edu.